Abraaj Capital buys stake in Bosicor Group

Abraaj Capital has announced it has acquired a stake in the holding company of Bosicor Group (Bosicor), positioned to become one of Pakistan’s leading integrated oil companies.

This stake, announced yesterday, will provide Abraaj, an investment firm specialising in private equity investment in the Middle East, North Africa and South Asia, with a 40 per cent shareholding in Bosicor’s two group companies: Bosicor Oil Pakistan Limited and Bosicor Chemical Pakistan Limited.

Abraaj will also acquire a minority stake in Bosicor Pakistan Limited (BPL), equivalent to the shares acquired through a mandatory tender offer to be made to other shareholders in BPL.

The group’s subsidiary, BPL, currently operates the fifth-largest oil refinery in Pakistan, with a rated capacity of 30,000 barrels per day and a market share of 12 per cent. Established in 1995, BPL is listed on all three stock exchanges in the country. BPL is active in the production, marketing and sale of petroleum products.

The investment in Bosicor was made through Abraaj Capital’s $2 billion (Dh7.3bn) Infrastructure and Growth Capital Fund, which seeks to address the infrastructure requirements of the Menasa region in various sectors, including transportation, education, healthcare, water, manufacturing, petrochemicals, and power and utilities.

The investment will fund the establishment of a petrochemical plant and a refining unit that will provide the Bosicor Group with an initial aggregate refining capacity of 145,000 bpd and create an integrated platform that operates across the full value chain in the oil sector.

Further investments in related infrastructure are planned over the next few years with a view to creating Pakistan’s first global-scale refining, petrochemicals and energy conglomerate.

With demand from transportation, power and manufacturing sectors increasing due to thriving economic activity in Pakistan, including annual GDP growth of up to eight per cent, the country’s total demand for petroleum products is forecast to rise at a five-year compound annual growth rate of five per cent until at least 2010. Pakistan currently imports over 50 per cent of its high-speed diesel requirement and almost 100 per cent of petrochemical products.

“This investment in the future of Pakistan will greatly enhance the country’s ability to fuel its ongoing economic expansion,” said Arif Naqvi, vice-chairman and group chief executive officer, Abraaj Capital.